The government’s proposal to have a minimum 25% public shareholding in all listed firms was welcomed from most quarters in the stock market, with analysts suggesting that it will lead to a higher float, more transparency and less chance of manipulative trading and better price discovery.
So it should not come as a surprise that which entity will come out against this. It has to the communist party of India.
“It is a manipulative work of the finance ministry to encourage privatization. We will oppose it” Quote-unquote D. Raja, national secretary, CPI.
They are “concerned” that this is a way of the government circumventing one of the CMP points of government maintaining 51% stake in the PSU’s. This comes into picture because the top 5 listed firms in terms of least amount of public holding are all PSU’s. (Hindustan copper, NMDC, HMT, FACT and MMTC).
“It is not a question of percentages. It’s a question of policy. This will weaken public sector undertakings (PSU’s) and make them vulnerable to creeping privatization,” claimed Raja
Weaken? Well, I was just wondering, how can you make organizations like HMT and FACT any more “vulnerable” as they have already been identified as “Sick” organizations?
A classic case of agency problem at work? After all, the “public” shareholding pattern in these companies is miniscule!
Whose interests are they trying to protect here, now?!!
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